by Mariana Mazzucato
a tipping point on climate change,
when protecting the future of civilization
will require dramatic interventions.
Avoiding this scenario
will require a green economic transformation
and thus a radical overhaul
of corporate governance, finance, policy,
and energy systems.
As COVID-19 spread earlier this year, governments introduced lockdowns in order to prevent a public-health emergency from spinning out of control.
Shifting Arctic ice, raging wildfires in western US states and elsewhere, and methane leaks in the North Sea are all warning signs that we are approaching a tipping point on climate change, when protecting the future of civilization will require dramatic interventions.
Under a "climate lockdown," governments would,
fossil-fuel companies would have to
To avoid such a scenario, we must overhaul our economic structures and do capitalism differently. Many think of the climate crisis as distinct from the health and economic crises caused by the 'pandemic'.
COVID-19 is itself a consequence of environmental degradation:
Moreover, climate change will exacerbate the social and economic problems highlighted by the 'pandemic'.
These shortcomings reflect the distorted values underlying our priorities.
The climate crisis is also a public-health crisis. Global warming will cause drinking water to degrade and enable pollution-linked respiratory diseases to thrive.
According to some projections, 3.5 billion people globally will live in unbearable heat by 2070.
Addressing this triple crisis requires reorienting corporate governance, finance, policy, and energy systems toward a green economic transformation.
To achieve this, three obstacles must be removed:
Corporate governance must now reflect stakeholders' needs instead of shareholders' whims.
In the current crisis, for example, the French government conditioned its bailouts for Renault and Air France-KLM on emission-reduction commitments.
...denied state aid to any company domiciled in a European Union-designated tax haven, and barred large recipients from paying dividends or buying back their own shares until 2021.
These conditions are a start, but are not ambitious enough, either from a climate perspective or in economic terms.
The magnitude of government assistance packages does not match firms' requirements, and the conditions are not always legally binding:
Far more is needed to achieve a green and sustainable recovery:
They might also introduce job guarantees at company or national level so that human capital is not wasted or eroded.
This would help the youngest and oldest workers, who have disproportionately suffered job losses owing to the 'pandemic', and reduce the likely economic shocks in disadvantaged regions already suffering industrial decline.
Finance needs fixing, too.
But, because they did not direct it toward good investment opportunities, much of that funding ended up back in a financial sector unfit for purpose.
The current crisis presents an opportunity to harness finance in productive ways to drive long-term growth.
Patient long-term finance is key, because a 3-5-year investment cycle doesn't match the long lifespan of a wind turbine (more than 25 years), or encourage the innovation needed in e-mobility, natural capital development (such as rewilding programs), and green infrastructure.
Some governments have already launched sustainable growth initiatives.
Along with steering finance toward a green transition, we need to hold the financial sector accountable for its often-destructive environmental impact.
In the United Kingdom and the United States, wider industrial policy continues to support the information-technology revolution.
Similarly, the EU's recently launched European Green Deal, Industrial Strategy and Just Transition Mechanism, are acting as the motor and compass for the €750 billion ($888 billion) "Next Generation EU" recovery fund.
Finally, we need to reorient our energy system around renewable energy - the antidote to climate change and the key to making our economies energy-secure. We must therefore evict fossil-fuel interests and short-termism from business, finance, and politics.
Financially powerful institutions such as banks and universities must divest from fossil-fuel companies.
Until they do, a carbon-based economy will prevail.
The window for launching a climate revolution - and achieving an inclusive recovery from COVID-19 in the process - is rapidly closing. We need to move quickly if we want to transform the future of work, transit, and energy use, and make the concept of a "green good life" a reality for generations to come.
One way or the other, radical change is inevitable; our task is to ensure that we achieve the change we want - while we still have the choice.